Axis REIT seeks to buy more assets worth RM560mil

Axis REIT seeks to buy more assets worth RM560milKUALA LUMPUR: Axis REIT Managers Bhd, which expects to complete by year-end the acquisition of three properties worth about RM40mil, is eyeing another RM560mil worth of assets.

Chief operating officer Stewart LaBrooy said Axis REIT aimed to expand its portfolio by RM180mil by the first half of next year and manage more than RM1bil in assets by end-2009.

Briefing reporters yesterday on the earnings for the second quarter ended June 30, Labrooy said: “We are in negotiations for three assets worth about RM240mil.”

However, he declined to disclose details of the proposed acquisition.

It also planned to acquire eight completed projects valued at RM320mil from private equity, he said.

Axis REIT owned 17 properties worth RM651.4mil as at June 30, compared with 15 properties valued at RM608mil on March 31, he said.

LaBrooy also said Axis REIT expected to complete by year-end the acquisition of three smaller properties valued at RM39.6mil, increasing its total assets to RM690.9mil.

To reduce borrowings and finance more acquisitions, Axis REIT planned to raise RM200mil by placing out of 120 million new units, he said.

“The placement is likely to be done in two tranches of 60 million units each. The first tranche will be in the fourth quarter of this year and the second in the second quarter of next year,” he said.

On its proposed reclassification as a syariah-compliant REIT, LaBrooy said Axis REIT hoped to get Bursa Malaysia approval by next year.

With the reclassification, Axis REIT hoped to widen its investor base to include local syariah funds as well as develop investor interest from foreign syariah funds, he said, noting that Axis REIT would appoint a syariah advisor to oversee the REIT's operations.

On Axis REIT's wish list for Budget 2009, LaBrooy said he hoped the withholding tax would be removed to attract more investors to the REIT market.

The current withholding tax rate for individuals and foreign institutions in Malaysia is 15% and 20% respectively compared with Singapore's 10% for foreign institutions.

For the first half year, Axis' net profit rose 47.31% to RM18.62mil from RM12.64mil a year ago.

By The Star